Government considering 'Strategic Energy Fund' for India

NEW DELHI: After studying major sovereign wealth funds (SWFs) in different countries, the government is planning to create a 'Strategic Energy Fund', Parliament was informed today.

"The Planning Commission had prepared a proposal for creation of a 'Strategic Energy Fund' for India, after a study of major SWFs based in different counties," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha today.

On the fund proposal, Meena said, "The Planning Commission has inter-alia examined the sources of financing and objectives of these SWFs."

On a query whether government has any plan to finance such fund, Meena said, "Various issues relating to the setting up of the sovereign wealth fund (SWF), including the financing of such a fund, have to be finalised before a final decision is taken in the matter."

He said that SWFs have been broadly concluded to have been created by the exporters of oil and gas, copper and other minerals (30 SWFs).

Countries with persistent and large current account surpluses have set up SWFs (5). Even those countries that do not have a history of persistent current account surpluses have also created SWFs (4) for somewhat diverse objectives.

On a query on existence of similar funds in some neighbouring counties, Meena said that the Ministry does not maintain records of SWFs in other countries.

"However, Securities and Exchange Board of India (Sebi) has informed that they have granted registration to some foreign institutional investors (FIIs) under the category of sovereign wealth fund or foreign governmental agencies or foreign central bank," he added.